Step Costs, Relevant Range Bellati Inc. produces large industrial machinery. Bellati has a machining department and a group of direct laborers called machinists. Each machinist can machine up to 500 units per year. Bellati also hires supervisors to develop machine specification plans and oversee production within the machining department. Given the planning and supervisory work, a supervisor can oversee, at most, three machinists. Bellati's accounting and production history shows the following relationships between number of units produced and the annual costs of supervision and materials handling (by machinists): Units Produced 0-500 Direct Labor Supervision $ 36,000 $ 45,000 501-1,000 72,000 45,000 1,001-1,500 107,000 45,000 1,501-2,000 144,000 85,000 2,001-2,500 180,000 85,000 2,501-3,000 216,000 85,000 3,001-3,500 252,000 120,000. 3,501-4,000 288,000 120,000 Required: